UK Chancellor of the Exchequer George Osborne presents his annual budget in a speech to the House of Commons. He'll give new growth and deficit forecasts.

Currencies

Federal Reserve chair Janet Yellen and her colleagues have an opportunity tomorrow to clarify where they stand on the outlook for interest rates. The message will probably be that plans for additional tightening have been postponed, but not for long.

The yen appreciated 0.9 per cent to 125.29 per euro after the BOJ maintained a negative policy rate and kept asset-purchase plans unchanged. Japan's currency strengthened 0.9 per cent to 112.83 per dollar. The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, was added 0.3 per cent.

The yen's rally has dominated currency markets for the past three months and for Societe Generale, now it's time to "just sell the yen already". The BOJ's negative rates decision "in the midst of market turmoil six weeks ago back-fired but the backdrop is different today," Kit Juckes, a global strategist at Societe Generale in London, wrote in an emailed report. "The likelihood of a hawkish tone from the FOMC on Wednesday and the bright underlying tone to risk sentiment makes long dollar-yen look like a good risk-reward trade here," wrote Juckes.

Commodities

Iron ore dropped for a sixth day, erasing gains from a record spike, as data showed Chinese steel production weakened further at a time when supplies from the biggest miners are set to increase. The steel-making ingredient has declined every day after a 19 per cent surge to $US63.74 a dry metric ton on March 7, the biggest one-day advance for daily prices going back to 2009 compiled by Metal Bulletin. Ore with 62 per cent content delivered to Qingdao fell 4.8 per cent to $US52.88 on Tuesday, according to the data.

Benchmark copper on the London Metal Exchange fell 1 per cent to $US4945 a tonne in official trade, recovering from an earlier low of $US4881.50. Large holdings of copper warrants and cash contracts on the LME has created nearby tightness and pushed the premium for the cash contract over the three-month future to a four-month high above $US25 a tonne on Monday. The premium on Tuesday was around $US18 a tonne.

United States

US stocks slipped in light trading, with the Standard & Poor's 500 Index posting back-to-back declines for the first time this month, as investors considered the capacity of central banks to boost global growth.

The complexion of Tuesday's retreat mirrored yesterday's results, with commodity companies among the biggest losers, joined again by health-care and financial shares. Valeant Pharmaceuticals International plunged 51 per cent after cutting its profit forecast. Apple added 2 per cent amid positive analyst comments on iPhone sales, while baby formula maker Mead Johnson Nutrition surged 11 per cent on deal speculation.

A report showed retail sales dropped in February and the prior month's gain was revised to a decline, calling into question the narrative that bigger gains in consumer spending would propel economic growth at the start of 2016. Separate data showed wholesale prices fell last month, held down by lower fuel costs that have kept inflation languishing below the Fed's goal.

Another measure showed confidence among homebuilders held in March at a nine-month low as sales prospects waned, while other data indicated inventories at warehouses, stores and showrooms are not being drawn down amid tepid underlying demand.

Europe

Declines in commodity and energy producers dragged down European stocks from a two-month high, after the Bank of Japan refrained from boosting its record monetary stimulus.

Anglo American tumbled 11 per cent. Antofagasta slid 4.5 per cent, paring losses of as much as 11 per cent, after abandoning its dividend and saying annual profit slumped 99 per cent. A gauge of energy shares tracked crude lower, with Tullow Oil and Seadrill down more than 9.5 per cent.

The Stoxx Europe 600 Index dropped 1.1 per cent at the close of trading.

What happened yesterday

After being one of the top sharemarkets in Asia for the past two weeks, Australian shares underperformed on Tuesday, led down by the mining and bank stocks. Futures trading had suggested a muted Tuesday session ahead of a crucial two-day US Federal Reserve meeting. However the market opened lower, and losses accelerated through the afternoon.

At close of trade the S&P/ASX 200 ended 1.4 per cent, or 74 points lower, to 5111.4, the biggest loss in nearly three weeks. The broader All Ordinaries fell 1.4 per cent or 73.7 points to 5168.6.